"I felt that the conditions were in place for a recovery beginning in 2011," said Barnes, who is a member of the Camera's Editorial Advisory Board. "But it's typical of housing that you can have conditions preceding, but no ignition for a long time."

Instead, the activity resembled that of what existed in 2009 and 2010.

Last year, however, saw a different story.

Gains in home sales remained consistent throughout 2012 and Boulder and Broomfield counties closed out the year with a 24 percent uptick in single-family home sales, according to Boulder Area Realtor Association data.

Boulder County averaged 66 foreclosure filings per month last year, returning to 2006 levels, according to the Boulder County Public Trustee's office.

Rental markets grew even tighter across the Denver metro area and Colorado's rate of delinquent active mortgage lows is half the national average.

By those indications and coupling them with the expectations that historically low mortgage rates will continue, it appears that Colorado's housing market -- which experienced a downturn that preceded that of the national slump -- has entered its recovery, Barnes said.

"All of these same metrics flashed green at the same time and we had a roaring housing market from late 1991 into 1994," Barnes said. "This time, because credit conditions are so tight, I think we are not likely to roar, but, on the other hand, have a much longer positive interval than in the 1990s."

Seller's market

In the closing quarter of 2012, activity at Re/Max of Boulder was "extremely strong," said D.B. Wilson, managing broker, who estimated that showings during that period were up 70 percent from average.

Ford Brown points out the view of the Flatirons for his wife Oksana as Amy LaBorde, left, of Re/Max Alliance on Walnut shows a home in Boulder last week.
(
Paul Aiken
)

The number of showings per listing has skyrocketed, but that is because of the current nature of the market: the housing inventory in Boulder County is considerably low.

During a stable market, a typical inventory level -- a measure of the time it would take to sell all existing listings before additional houses were listed -- would be around five to seven months, he said. Boulder County's inventory is 3.4 months, he added.

The low inventory seemed to shock some potential buyers in the first half of last year, said Jay Hebb, a partner at Re/Max Alliance on Walnut.

"They were losing out on properties," he said.

Those properties also were becoming pricier.

"The inventory is a huge function of that," he said. "In 2012, from the buyers' perception, the economy (improved) and inventory increased. In a lot of respects, it was a perfect storm for pricing."

By every definition, it appears that Boulder and Broomfield counties were experiencing a seller's market; however, not all buyers necessarily were biting.

"The buyers are very discerning, so it still is important to price it right, and it has to show very well," Wilson said. "In the past we might have seen with a lack of inventory people just settling for things, and that's not really the case at this point."

Low interest rates, averaging 3.5 percent for a 30-year fixed mortgage, are courting potential buyers, but the low inventory and concerns about credit limitations have hindered a buying spree, he said.

The current conditions, however, are enough to give Wilson optimism that the local market is healthy and that its gains could continue through 2013.

"If the interest rates suddenly really pop up, that could be a concern," he said. " ... Even if they pop up by 1 (percentage point), it is still so far under the 30-year average."

Short-term volatility

Despite some of the positive gains and momentum, the short-term real estate market in Colorado remains somewhat volatile, said Ryan McMaken, a spokesman for the Colorado Division of Housing.

"If the economy improves at all, then household formation is going to take off," he said. "Then, new production will have to answer that.

Amy LaBorde, right, of Re/Max Alliance on Walnut, shows a home to Ford and Oksana Brown in Boulder last week. It appears the housing market in Boulder County and across Colorado has entered its recovery.
(
Paul Aiken
)

"Then there's going to be a two-year delay."

Multifamily production ramped up significantly last year -- the 85 percent increase in building permits was the largest increase in 22 years, McMaken said.

To sustain that pace for a second year, "it's going to be hard," he added.

The tight apartment market, rising rents and gains in home prices could create issues for some, he said.

"There's definitely going to be an affordability issue," he said. " ... The short term is very volatile. The longer term I'm confident that the industry will produce housing."

It's expected that several thousand new units will be added, but those gains are not expected to keep up with new household formation, nor make much of a dent in the 65,000-unit deficit the state ran up during the past four years, he said.

"I think the industry is going to be somewhat constrained by fears of not being sufficiently profitable ... they're not going to want to overbuild," he said.

The increasingly cramped -- and increasingly more expensive -- rental market has driven some people into the residential market, said Liz Rodman-Mandel and Sandi Storck, Realtors with Coldwell Banker's StorkNest Team in Boulder who also handle distressed properties.

"We saw more traction in the November and December time frame (in 2011) and that continued through August and September," Storck said. "I think there's definitely more consumer confidence over the last three to four years prior."

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